Samsung Electronics in the third quarter managed to rise above challenging conditions in the DRAM business to achieve an all-time record-high market share.
Longtime industry leader Samsung expanded its share by 3.5 percentage points to garner an impressive 45% slice of DRAM market revenues in the third quarter, the highest portion of the market that the company has ever taken on a quarterly basis. While Samsung's DRAM revenues declined by 8.9% compared to the second quarter, the company still handily outperformed the industry as a whole, allowing it to expand its lead over the other suppliers.
"Samsung perennially has the DRAM industry's largest capital expenditure budget, allowing it to reduce costs and offer advanced products more quickly than the competition," said Mike Howard, principal analyst for DRAM and memory. "Because of this, the company was better able to absorb the decline in average selling prices (ASP) in the third quarter, which fell 26% for the DRAM industry as a whole. Samsung's ASP fell just 17% during the quarter, while its shipments increased 9%, helping it to outperform the industry."
The 26% ASP decrease for the overall DRAM market in the third quarter compares to an average quarterly decline of 2% since the beginning of 2009. The extraordinarily weak pricing caused DRAM industry revenues in the third quarter to decline by 15.8% to US$6.8 billion, down from US$8.1 billion in the second quarter.
"DRAM demand in the third quarter was undercut by anemic sales of PCs - which represent the primary market for the memory type," Howard noted. "The consumer appetite for PCs has been dampened by weak economic conditions combined with competition from media tablet devices."
Micron outperforms
Micron Technology posted an even better performance than Samsung in the third quarter. Micron's revenues declined by only 3.8% sequentially in the third quarter. As a result, the company's share of market revenues increased to 12.1%, up from 10.6% in the second quarter.
This put fourth-place Micron within a hair's breadth of third-place Elpida Memory, which saw its share decline to 12.1%, down from 14.6%, on revenues of US$823 million. Elpida's shipments were up 16% in the third quarter, but its ASP plummeted a steep 39%. The rising yen also made the Elpida manufacturing facility in Japan appear relatively expensive compared to production sites in other countries.
Like Elpida, second-place Hynix Semiconductor suffered a loss of market share in the third quarter. With revenues of US$1.5 billion, Hynix had 21.5% share, down from 23.4%. The company's ASP fell faster than the industry average, sinking 29% during the period.
Another supplier to suffer a market share decrease was fifth-place Nanya Technology, down to 3.6% market share from 4.7% - a significant drop largely driven by the supplier's relatively weak ASP, which fell 32%. Nanya's shipment growth of 7% also was slightly lower than the industry average of 13%. Nanya continues to be heavily exposed to the commodity DRAM market and will find the next few quarters an uphill climb, especially as this segment is expected to remain in a slightly oversupplied position.
Rounding out the Top 8 were Winbond Electronics, one of the few market share gainers along with Samsung and Micron, in sixth place; ProMOS Technologies down to less than 1% share, in seventh place; and Powerchip Technology, rebounding after not shipping any branded DRAM in the second quarter, in eighth.